Proposed Medicare/Medicaid Rule May Target Those Who Receive Negligence Award

Many community members are familiar with the basics of a negligence lawsuit, including those connected to medical malpractice. In most cases, after suffering an injury, the party initiates the suit by filing a “complaint” that lays out their legal arguments. That begins the long process of each side collecting evidence to be used in a possible trial. This includes conducting depositions, going through paperwork, and more. At some point the parties may engage in settlement negotiations. A settlement might be reached which may end the formal matter. If no agreement is reached, then the case may go to trial with a final decision from a judge or jury.

But does that end it? Not quite.

That is because one little understood part of the process is the work required to actually collect the award or settlement amount. For one thing, other parties may claim to have a stake in that amount. In medical malpractice cases, among others, that includes Medicare and Medicaid, if those programs provided care for the injured party.

Unfortunately, over the years there has been considerable confusion and disagreement about how much of a settlement or award must be handed over to public coffers for claimed outlays made by the programs. In fact, last year the U.S. Supreme Court invalidated one state’s scheme to automatically take a large chunk of all awards instead of tying those awards to actual Medicare or Medicaid payments.

The next issue of contention appears to be payment to these government programs for “future” medical expenses. Last year the Centers for Medicaid and Medicare (CMS) issued a new proposed rule explaining when an injured party would be required to pay for future medical care connected to the accident from their award or settlement. Unfortunately, the proposed rule is a significant detriment to those hurt in these incidents.

For that reason the American Association of Justice (AAJ) argued vociferously against the proposal. Our team of injury attorneys at Levin & Perconti similarly stand opposed to the CMS rule.

The AAJ noted in a letter to CMS (view here) how the rule is “far too attenuated” for CMS to grab at liability awards for unclear future expenses. By forcing more of an award to be steered from the actual injured party, it will become harder for many suits to be pursued at all having a “chilling’ effect on the necessary accountability function of these lawsuits.

One underlying issue is CMS’s equating injury liability cases to the worker’s compensation system (where CMS is able to collect for future expenses). In liability cases, the settlement process hinges closely on understanding future need and available funds for the injured party. If CMS creates a system with future medical payments funnelled away from the party, vast uncertainty may be thrown into the settlement process. In short, it may make it much harder for parties to reach agreement and end the matter amicably.

The AAJ letters further reminds that “Medicare must only pursue a proportionate share of any future medical treatment. Any regulation that does not meet these objective will fundamentally disrupt civil litigation across all fifty states as well as undermine the interests of Medicare beneficiaries and the Trust Fund.”

Our attorneys will be following along closely as this CMS rulemaking process plays out. We will continue to voice clear opposition to any changes that unfairly target those seeking accountability following negligence including those affected by medical malpractice.

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